ASIC ‘confirmed’ solvency of insolvent company paid to build Wagga public housing, Homes NSW says

The Federal Government business regulator “confirmed” a company chosen to build public housing in Wagga “was solvent” at a time it was actually insolvent, according to the NSW Government department that managed the contract.

The Land and Housing Corporation (LAHC), now called Homes NSW, chose insolvent company Matrix Group Co as its main contractor to build four government units at 16 Spring Street in late 2020 and kept paying Matrix for almost a year while the Sydney construction business was deeply in the red.

When this company officially went into liquidation in October 2021, local subcontractors were left hundreds of thousands of dollars out of pocket and still have not been paid for constructing the dwelling now occupied by Homes NSW tenants.

Homes NSW has refused to pay the Wagga tradespeople directly, despite being urged to do so by Wagga MP Joe McGirr. The department had also repeatedly refused to answer questions from Region on why it chose and kept paying an insolvent company to build public housing, but a spokesperson finally provided a statement on 28 March.

“This matter is difficult and complex, but Homes NSW disputes the assertion that we knew the builder was insolvent when the contract was awarded,” he said.

“Homes NSW confirms we did mandatory pre-qualification checks on Matrix Group Co Pty Ltd.

“ASIC confirmed in writing that Matrix Group was solvent at the time of contract award in late 2020.”

ASIC (Australian Securities and Investments Commission) is an independent Federal Government body that regulates businesses.

When asked by Region if it confirmed the solvency of Matrix Group in late 2020, ASIC declined to comment.

A liquidator document seen by Region stated: “My investigations indicate that the Company [Matrix Group] was insolvent from at least 1 July 2020 onwards and remained insolvent until the date of liquidation.”

The document indicated Matrix was almost $2 million in the red by 1 July 2021, but Homes NSW kept paying it for a further four months.

Richard Foley, a plasterer who is owed $55,000 on the Wagga Spring Street project, says he is considering legal action against Homes NSW.

“We are trying to get a group together to organise an action against the government,” he said.

“That will likely entail having to subpoena government records and indeed former ministers if need be.

“My view is that we should be going for exemplary damages and setting an example of the state.

“The correct ethical and moral thing for Homes NSW to do is to pay people for work they have done to build a Homes NSW asset.”

He also said he would like to see the matter referred to the state’s corruption watchdog, the Independent Commission Against Corruption (ICAC).

“I just don’t understand how an insolvent company can be given multi-million dollar government contracts,” he said.

Matrix Group Co was contracted to build public housing under the previous NSW Coalition government. Current Labor NSW Housing Minister Rose Jackson responded to the call for ICAC involvement.

“We have not seen anything to indicate corruption. With that said – anyone can refer this matter to the Independent Commission Against Corruption (ICAC) if they have any information which they believe falls within the description of corrupt conduct,” she said.

“The matter is currently being investigated by the NSW Building Commissioner and we are also awaiting the results of the liquidation process, as this operates separate of the NSW Government.”

The NSW Building Commissioner oversees and regulates the state’s construction industry.

Region asked the Commisioner’s office if he was investigating why Homes NSW chose an insolvent builder to construct public housing and when he would conclude his inquiry, but did not receive a response.

Mr Foley said he was disappointed with how Minister Jackson had handled the matter.

“I can’t understand why she’s defending the previous Coalition government,” he said.